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Marissa Mayer (Photo credit: Wikipedia)

When Marissa Mayer took the helm at Yahoo! last summer, she did so amidst great expectations. The company had gone through four CEO’s in five years and Mayer, Google’s 20th employee and a genuine Silicon Valley star, looked like a savior.

I'm sure it wasn't easy. Being a new mother herself, Mayer obviously was aware of the issues involved and there were, in fact, some grumblings, but ending the practice of working from home shows that she wants to do more than build great technology, she wants to build a great culture too.

Why An Office Matters

While telecommuting is a modern practice, the debate is not a new one. For a long time, economists were puzzled why companies needed full time employees. It seemed like it would be more efficient to hire workers when you needed them, rather than going to the trouble and expense of keeping them on staff.

Then a young economist named Ronald Coase solved the riddle in his groundbreaking paper on The Nature of the Firm, which not only earned him a Nobel Prize, but influenced generations of management theorists. In it, Coase argues that it makes sense to have resources on hand because there are transaction and search costs associated with procuring them on short notice.

However, advances in communications technology have made telecommuting popular. Not only can remote workers reduce costs, but it is thought that the practice promotes a better work/life balance.

After all, we live in a semantic economy where people can set up an entire company, complete with financing, marketing, production and even supercomputing resources, from their breakfast table, why not work from home?

Mayer, on the other hand is focused not so much on cutting costs, but on building the kind of collaborative workplace that can create truly inspiring products. As she writes in her memo:

To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo! and that starts with physically being together.

That doesn't mean she's unconcerned with her employees quality of life. In fact she's already started incorporating the practices that made her former employer, Google, one of the absolute best places to work on the planet.

Mayer made a tough call. Many of the remote workers joined Yahoo! because they could work at home and they are understandably upset. However, the role of a CEO is not to try to please everyone, but to lead. That means making decisions that people aren't going to like, dealing with the consequences and moving forward.

We've known for a long time that Marissa Mayer is one of the smartest people in technology. Now it seems that she might have the of strength character to be a great leader as well.